Try updating your sound card drivers. Since the problem is in audio initialization, that might help.

OK, this is weird. I have a soundblaster X-Fi Extreme Audio card. Drivers up to date. It fails as above. However, if I change the default sound to the integrated sound, it works! I cant hear anything because my speakers are hooked into the sound card, but at least I can play the game. I wonder if it is possible to disable the integrated sound via the bios when I boot up, then maybe it would work off my sound card? (some sort of conflict perhaps?)